country studies on bangladesh, nepal and sri lanka - Escap

STUDIES IN TRADE AND INVESTMENT 70
particularly lawyers, accountants, business consultants and technical consultants do not
provide cost effective management solutions required for SMEs. Furthermore, lack of
information and accessibility to utilize existing services by SMEs has also resulted in
weak demand for such facilities. Obtaining information on commercial law, taxation,
customs regulation, market intelligence, business advisory services, training
opportunities and financing sources is generally expensive and time consuming; thus,
most of the SMEs, particularly in South Asian countries are unable to avail themselves
of those provisions. It is therefore most desirable that governments should take the
lead in promoting such critical SME development services jointly with business and
industry associations. Donors particularly can assist by providing financial assistance
and sharing in successful business experience coming from other countries, including
professional certificate schemes for service providers.
The six key areas for SME development, where donors’ assistance is provided,
require further strengthening. With active involvement of all stakeholders, particularly
SME associations, chambers of commerce and industry as well as governments soliciting
large donor assistance, a supportive environment can be fostered for SME development.
This is particularly important, as the emergence of global value chains poses new
challenges but also provides opportunities for SMEs.
1.3. The emergence of global and regional value chains
8
One significant development in the Asia-Pacific business sector has been the
emergence of global and regional supply or value chains. 3 A global value chain refers
to the full range of cross-border value added business activities, which are required to
bring a product or service from its conception through design, sourcing raw materials
and intermediate inputs, production, marketing, distribution and support to the final
consumer (ESCAP 2007). The rise of these global value chains is the result of two
interdependent and complementary dynamics: reorganization and relocation. While
the first involves business decisions about what core competencies the enterprise needs
to retain and which functions it could outsource, the latter one is about offshoring, i.e.
moving the firm’s entire or partial operations to another <strong>country</strong> (ESCAP 2007).
Furthermore, global value chains have also grown as a result of some key developments,
accompanying the globalization process, and the emergence of international
production networks. Such developments include trade and investment liberalization,
the development of low-cost and fast logistics systems and ICT applications that enable
products and services, including semi-processed outputs, to quickly and efficiently move
across the world.
3
For further details, see United Nations, Globalization of Production and the Competitiveness of
Small and Medium-sized Enterprises in Asia and the Pacific: Trends and Prospects. Sales No.E.09.II.F.23;
United Nations., Asia-Pacific Trade and Investment Report 2009:Trade-led Recovery and Beyond.
Sales No.E.09.II.F.19; United Nations, Linking Greater Mekong Subregion Enterprises to International
Markets: The Role of Global Value Chains, International Production Networks and Enterprise Clusters,
Sales No.E.07.II.F.2.